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Implementation of DOL's New Persuader Rule Permanently Blocked

A federal court in Texas has issued a decision permanently blocking the U.S. Department of Labor (DOL) from implementing the final version of its "persuader rule." See National Federation of Independent Businesses v. Perez (N.D. Tex. November 16, 2016). On June 27, 2016, the court issued a temporary injunction prohibiting the DOL from implementing the rule. In its June 27 decision, the court held that a temporary injunction was appropriate because the parties challenging the rule were likely to succeed on their claim that the rule exceeds the DOL's authority under the LMRDA since it conflicts with the plain language of that statute. Additionally, in the June 27 decision the court held that the parties challenging the rule were likely to succeed on their claims it violates the Administrative Procedures Act, is arbitrary and capricious and an abuse of the DOL’s discretion, and that it violates employers’ Constitutional rights to free speech and association. In today’s decision finding the rule unlawful, the court adopted the reasoning set out in the June 27 decision. The court also converted its earlier temporary injunction into a permanent injunction with nationwide effect.

The details of the DOL’s final rule are discussed in our June 13, 2016, Alert.

The DOL had earlier appealed the court’s preliminary injunction to the Fifth Circuit Court of Appeals. It is not clear whether the DOL will continue to pursue that appeal or whether it will appeal the permanent injunction issued today, but it is unlikely that the DOL will continue efforts to expand the persuader rule under the Trump Administration.

The Bottom Line:

By permanently enjoining the DOL from implementing the new rule, the court has kept in place the interpretation of the persuader rule that has been in force for well over 50 years. As a result, employers can continue to obtain a full range of advice from their attorneys and other consultants on responding to union organizing and other union activities without having to file intrusive reports with the DOL.

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